Edinburgh’s city centre’s office rent prices are likely to exceed £35 per square foot this year as a lack of supply will continue to drive up costs for the capital’s businesses, according to property advisor Savills.
Savills research found that Edinburgh’s office take-up during 2018 was 950,000 sq ft. Some of the key deals included Baillie Gifford pre-letting 60,000 sq ft at the Mint Building and Royal London leasing the entire 47,000 sq ft of 22 Haymarket Yards. Despite 2018’s total sitting 18 per cent higher than their ten-year average, the figure indicated a slight drop compared with the previous year, when take-up in Edinburgh exceeded 1.04 million sq ft.
The report noted that rising building costs are also impacting office rents in the city centre. According to the property advisor, there needs to be a step away from the dated property system – e.g. calculating rates per sq ft - and a move towards a cost per desk.
West Edinburgh up to 40 per cent cheaper than city centre office space
With demand outweighing supply, commercial property prices in Scotland’s capital will rise, leaving organisations to consider other locations.
According to Savills, looking out-of-town - in particular, west Edinburgh - will grow in popularity with those businesses that are flexible in terms of location and could be a solution for the lack of supply in the city centre. Over the past few years, west Edinburgh has seen significant public sector infrastructure investment and now boasts vital public transport links including rail stations, a tram and bus terminus.
West Edinburgh also provides the car parking and large floorplates that many occupiers seek and cannot find at a city centre location. Additionally, the price of office space out with the centre can be up to 40 per cent less than those in the capital.
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